Chinese eCommerce company Alibaba Group and its payments arm Ant Financial Services Group have agreed to make an investment upto $680 million (for 40% equity) in Indian mobile payment & commerce platform, Paytm. Ant Financial had earlier made its initial investment in Paytm in February 2015, while Alibaba will now become a new investor in Paytm after the completion of the transaction.
The new funding will be used to invest in marketing, technology and hiring talent. Investment in Paytm will enhance the ability of Alibaba and Ant Financial to tap opportunities in Indian mobile eCommerce marketplace and digital finance industry. Ant Financial and Paytm will continue to capitalize on opportunities in mobile wallet to offer Indian consumers comprehensive products and services and to tap the significant potential of the India mobile payment market.
The news just comes a month after Alibaba invested $500 million in Paytm’s peer Snapdeal, with participation from Taiwanese electronics manufacturer Foxconn along with existing Snapdeal’s investor SoftBank. In May itself, Paytm had received board’s approval to raise an additional $375 million from Alibaba Group’s affiliate Ant Financial.
This transaction further demonstrates the commitment of Alibaba to continue to internationalize its eCommerce business.
Talking about the investment strategy, Daniel Zhang, Chief Executive Officer of Alibaba Group said, “India is an important emerging market with strong e-commerce potential, and we look forward to partnering with Paytm to deliver products and services to consumers. This move will further expand Alibaba Group’s global footprint to India’s mobile commerce market.”
As per Paytm, it recently crossed 100 million Paytm Wallet users who carry out over 75 million transactions every month. The company expects to touch 150 million by March 2016, and it is also looking to cross monthly annualised sales of $4 billion in gross merchandising value by December.
With this investment, Paytm has inched closer towards its vision of bringing half a billion Indians to the mainstream economy.
The firm has 80,000 merchants on its platform and aims to touch close to 100,000 by the year-end after it allows zero-commission listings for small and mid-sized firms. The Noida-headquartered company is also planning to enter in new services such as selling movie and entertainment tickets, taking on Bookmyshow.com.